Want Half-Price Luxury Rooms? Come to Japan

If you were ever planning a trip to Japan, now’s the time to do it: luxury, 5-star hotels in Tokyo are now 50% cheaper than their regular rates as they try and woo foreign customers.

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Hotel staff wait for customers in the empty lobby of the Imperial Hotel in Tokyo on March 24.

“Occupancy rates have not really recovered following the earthquake,” said Peter Yoshihara, the senior marketing manager for travel reservations site hotels.com in Japan. “A lot of hotels are trying to fill up rooms – you still have 5 star hotels in Tokyo offering big discounts.”

Indeed, a quick search on hotels.com showed a number of 5-star hotels at bargain basement prices (relatively speaking): the Hotel Okura in Tokyo is available for $242 for week nights in July, down from $403; the regal Imperial Hotel is $290, down from $341; the Conrad Tokyo is $370 a night, down from $493; and the Four Seasons Hotel Tokyo at Marunouchi is going for $422, down from $562.

Mr. Yoshihara says that some Asian travelers are starting to come back to Japan, though Americans and European travel demand to Japan still remains weak. South Koreans, who represent the second-biggest tourist group to Japan after the Chinese, have started to travel to Osaka again: two weeks ago Osaka was ranked the number four most popular destination for Koreans, effectively replacing Tokyo as a top five travel destination. Tokyo has now slipped down into the top ten ranking.

Hotels.com, which is owned by Expedia Inc., launched in Japan in the summer of 2008, just before the global financial crisis. Although their timing was inauspicious, Mr. Yoshihara says e-hotel bookings in Japan are growing, as the base is low to begin with: only 20-30% of people in Japan book their holidays and hotel rooms online, compared with around 60% in the U.S. and Europe. Traditional bricks-and-mortar travel agencies in Japan, such as JTB, remain popular with older Japanese.

“By the year end we might see Americans coming back to Japan,” says Mr. Yoshihara. “I think the government could do more,” he added. “You have different sources of news coming out of Japan with conflicting reports…I don’t think there is a single solid voice saying, ‘Come to Japan’ – I think they could do a lot more.”

About Japan Real Time

Japan Real Time is a newsy, concise guide to what works, what doesn’t and why in the one-time poster child for Asian development, as it struggles to keep pace with faster-growing neighbors while competing with Europe for Michelin-rated restaurants. Drawing on the expertise of The Wall Street Journal and Dow Jones Newswires, the site provides an inside track on business, politics and lifestyle in Japan as it comes to terms with being overtaken by China as the world’s second-biggest economy. You can contact the editors at japanrealtime@wsj.com